In a recent article, I explored research looking at the transition towards remote working during Covid. The research found that while people were generally keen to live closer to nature and in places where they could afford larger properties, these moves were still primarily done to locations of a reasonable size.
This is confirmed in a recent study from the University of Oxford, which suggests that the benefits of working in the gig-based, platform economy only really emerge if you live in a city.
During the pandemic, many speculated whether we might finally be seeing the death of distance, with people choosing to work remotely from places where access to nature was more plentiful, house prices were more affordable, and people could enjoy minimal commutes and a generally better work-life balance.
Indeed, it raised the prospects of so-called “Zoom towns“, which tick all of these boxes while allowing workers to tap into global opportunities via digital platforms. The “Free Agent Nation” first proposed by Dan Pink in 2001 was finally here.
Except that wasn’t really what happened. Indeed, the Oxford paper suggests that the pandemic has not only not leveled the playing field between cities and rural areas, but has in fact exacerbated regional inequalities.
The research examined the use of online labor platforms, such as UpWork and Fiverr, and found that they tend to mirror the broad polarization of labor markets according to both skills and geography. What didn’t emerge was a more even distribution of work. This meant that work was most likely to go to people who live in both a developed country and also a cosmopolitan city within that country.
As such, while there are no longer any real technical barriers to working from anywhere, there remain economic-institutional barriers that result in the remote labor market being heavily polarized between countries and regions within countries. What’s more, the researchers also identified significant differences between job types.
“Countries are globally divided: North American, European, and South Asian remote platform workers attract most jobs, while many Global South countries participate only marginally….remote jobs are pulled to large cities; rural areas fall behind,” the authors write.
The findings demonstrate that place continues to matter, especially in terms of the institutions available in a location as these institutions play a crucial role in enabling work, even when it’s performed remotely.
For instance, the researchers believe that it’s most likely that people with the kind of digital skills that are in demand in the labor market are also those with access to vocational training, specialized education, and a wide range of local business opportunities. In other words, things that are more available to city dwellers.
Such people are therefore more likely to be able to access the many opportunities in the remote labor market than rural dwellers who lack access to those things and therefore are less likely to have the digital skills that are so valuable in finding good remote jobs.
“The data shows that most countries in the Global South are only marginally connected to the global web of remote work in the platform labor market,” the authors explain. “Within countries, we find that remote workflows to urban centers. These are the places where highly skilled labor is concentrated. The economic tale of the ’booming metropolis’ and the ’broken provincial city’ plays out fully in the platform economy.”
Dominating the market
These factors mean that as well as the agglomeration effect ensuring that cities tend to dominate both innovation and economic activity, they also attract the majority of remote platform work.
The typical relationship sees the work generated in high-income cities and being performed in cities in Eastern Europe, South Asia, and the Philippines. This means that countries from the Global South play only a marginal role in the remote labor market thus far.
What’s more, urban dwellers also earn far more than their rural peers, with city workers earning up to 53% more per hour than their rural counterparts. Far be it that remote work should allow economic prosperity to spread out across countries, therefore, it seems as though it entrenches regional inequalities.
There are a number of things that both platforms and policymakers can do to try and improve this situation and ensure that people from rural areas have the same opportunities.
For instance, the researchers advocate government-led digital work programs so that rural areas are embedded into larger economic development projects. Similarly, a form of platform apprenticeship might be offered for new remote workers, whereby initial jobs are assigned randomly to people without experience in order for them to establish their credibility.
Policymakers should also invest in areas such as broadband access and skills development in rural areas so that the ingredients for success exist. They might also look at ensuring that remote platform work is factored into government procurement.
Last, but not least, co-working spaces could be established to provide remote workers with a physical meeting point to enable network building, knowledge exchanges, and skills development to occur.
“We believe remote work can become an instrument of economic empowerment and growth,” the authors conclude. “But, for this to happen, remote work needs to be embedded in broader economic and labour market development schemes, supporting disadvantaged regions to invest in local skill development and infrastructure. Only in regions that flourish locally, remote workers can succeed globally.”